Exploring Incentives to Support Year-Round Housing on Cape Cod

On Cape Cod, the cost of purchasing or renting a home far exceeds what typical year-round households can afford. The Cape Cod Commission contracted with Outwith Studio to examine incentive-based strategies that communities can use to preserve and increase the supply of year-round housing, an issue that continues to affect the region’s workforce, families, and long-term residents.

The report focuses on two types of targeted incentive programs designed to convert or keep a portion of the housing stock for year-round use: year-round deed restrictions and year-round rental subsidies. These programs are framed as pilots, tools that can be tested, refined, and scaled based on local conditions and available funding.

Year-Round Deed Restrictions

One approach researched is the purchase of permanent or long-term year-round deed restrictions on homes. Under this model, a town or housing entity compensates a homeowner in exchange for restricting the property to year-round, primary residence use and prohibiting short-term rentals. A review of similar programs in other seasonal and resort communities found that deed restrictions are typically priced at 10 to 20 percent of a home’s value, often with a maximum incentive cap, though the programs can vary widely in terms of incentives and requirements.

For Cape Cod, the report recommends a pilot program offering 16 percent of a home’s value, capped at $125,000, rather than tying payments directly to the gap between what a home costs and what a household can afford. This approach is intended to avoid overpaying for restrictions while still providing enough incentive for participation. The report recommends pilot programs target households earning up to 150 percent of the area median income (AMI), with eligibility tied to local employment, community involvement, or other defined connections to the region, while also accommodating households with disabilities. Homes would be required to serve as a primary residence, being occupied for at least 10 months of the year, and short-term rental or vacation use would be prohibited.

Year-Round Rental Subsidies

The analysis also explores a second strategy focused on the rental market: providing annual subsidies to encourage year-round rentals. In many cases, property owners can earn more by renting seasonally or operating short-term rentals than by offering year-round leases. The report estimates that, across Cape Cod, the annual subsidy needed to make year-round renting competitive could range from approximately $9,000 for a one-bedroom unit to $22,000 for a four-bedroom unit, depending on location and market conditions.

Recognizing the cost and administrative complexity of such programs, the report recommends a more conservative pilot structure. Rather than fully offsetting potential short-term rental income, the proposed pilot would provide $4,000 per qualified tenant, up to $12,000 per household, for property owners who commit to new, 12-month leases. The focus would be on units that have not been rented long-term in the prior year, with the goal of shifting homes that might otherwise remain seasonal or short-term into the year-round rental market. Participating renter households should be income limited, earning no more than 150% percent AMI, and safeguards, such as limits on the number of subsidized units per owner, would help keep the program manageable.

The report notes that while rental subsidy programs can be effective, they are inherently impermanent and can become costly if expanded without clear limits. As a result, these programs are typically funded through local general funds, sometimes supplemented by philanthropic sources, and may be most appropriate to provide housing in the short-term while new units are being constructed and coming online. The analysis also points to opportunities to align funding with the seasonal economy, such as rooms excise revenues or short-term rental–related fees, particularly as communities consider longer-term housing strategies.

Seasonal Communities Designation

Finally, the study places these local tools within the context of recent state policy changes. In 2024, Massachusetts enacted the Affordable Homes Act, which created a “Seasonal Communities” designation and clarified certain legal pathways for year-round deed restriction programs. While local adoption and implementation decisions remain critical, the evolving state framework provides additional options for Cape Cod towns exploring housing solutions.

Overall, the analysis is intended to support informed local decision-making. By starting with pilot-scale programs, communities can test what works best in their specific housing markets while making incremental progress toward expanding year-round housing opportunities for the people who live and work on Cape Cod.